HDFC Bank Announces Q1 2023 Results and Plans IPO Stake Sale in NSDL After Mega Merger

HDFC Bank, a private lender in India, recently announced that it will release its financial results for the quarter ending June 30, 2023 on July 17. This is a departure from its usual practice of announcing results on Saturdays. The announcement comes shortly after the merger between HDFC and HDFC Bank, one of the largest mergers in the country.

In a stock exchange filing, HDFC Bank stated that its Board of Directors will convene on July 17 to discuss various matters, including the unaudited standalone and consolidated financial results for the first quarter of the fiscal year which ends on June 30, 2023. This meeting will mark a significant moment for the bank as it presents its financial performance for the first time after the merger.

Simultaneously, HDFC Bank revealed its plan to sell a 2% stake in the initial public offering (IPO) of National Securities Depository (NSDL). Currently, HDFC Bank holds an 8.95% stake in NSDL, which is responsible for handling the majority of dematerialized securities in the Indian capital market. The IPO will be an offer-for-sale (OFS) of more than 5.72 crore equity shares, with various shareholders participating in the sale.

Apart from HDFC Bank, other shareholders planning to offload shares through the OFS include IDBI Bank, National Stock Exchange (NSE), Union Bank of India, State Bank of India, the Specified Undertaking of the Unit Trust of India’s (SUUTI) Administrator. The draft red herring prospectus (DRHP) indicates that the IPO will list the company’s shares on the Bombay Stock Exchange (BSE). The offering may also include a reserved portion for eligible employees, potentially offering them a discount on the IPO price.

NSDL’s financial performance has been strong, with revenue reaching Rs 1,099.81 crore in the fiscal year 2023 and net profit amounting to Rs 234.81 crore, surpassing the previous fiscal’s figures. HDFC Bank highlighted that the sale price for the IPO will be determined once the offer price is finalized, and the IPO itself will provide an opportunity for stakeholders to participate in NSDL’s growth.

HDFC Bank also shared a regulatory filing regarding the amalgamation of HDFC Investments and HDFC Holdings with HDFC Limited, which took effect on July 1, 2023. Consequently, HDFC Limited was dissolved without being wound up. Additionally, HDFC Limited has now merged with HDFC Bank, further solidifying the combined entity’s position. As a result of the merger, every HDFC shareholder will receive 42 shares of HDFC Bank for every 25 shares they hold.

To facilitate the merger, the boards of directors of HDFC Bank and HDFC Limited have set July 13, 2023, as the date for determining the shareholders of HDFC Limited who will be issued and allotted shares of HDFC Bank. The same date has been fixed for the continuation of warrants of HDFC Limited in the name of HDFC Bank. Additionally, while the transfer of non-convertible debentures has been assigned on July 12, 2023, July 7 has been designated for the transfer of commercial papers from HDFC Limited to HDFC Bank.

The reverse merger between HDFC and HDFC Bank has significantly increased the total business of the merged entity to over Rs 41 lakh crore, bringing it closer to the size of State Bank of India (SBI), India’s largest lender. As a result of the merger, HDFC Bank now ranks as the fourth most valued lender globally and has narrowed the asset size gap with SBI, positioning itself as the second-largest bank in India.

With a total business volume of Rs 41 lakh crore at the end of March 2023, the merger has substantially strengthened the net worth of the merged entity, which now stands at over Rs 4.14 lakh crore. This development cements HDFC Bank’s position as a significant player in the Indian banking sector and sets the stage for further growth and expansion in the future.